The first thing you'll come across upon entering Belch's Factory is a "Slimy Little Pile" who'll ask you if you brought any Fly Honey with you. It is up to you how you answer. By telling him "yes", he'll leave you alone. Tell him "no" and you'll be forced to fight him. If you choose to fight, be careful because he can make everyone cry causing your attacks to miss often. He is just like the boss you fought when leaving Threed.
If you encounter little red circles running around on short stubby legs called Foppies, make sure to fight them. Not only are they extremely easy to defeat (even though you fight up to 6 at a time), they give a ton of experience. Take advantage of this and train up your characters a little more. Try to be at level 25 by the time you leave the Factory.
Open the door at the top right to get a bomb. Head back out and down two ladders and into another door on the right. In here you'll get an IQ Capsule and a Broken Laser. Do not leave without the Broken Laser because Jeff can fix it for a powerful weapon. Go back up the ladder and to the left. You'll come across another ladder that you should climb to another door. Inside you'll find a Vital Capsule, Calorie Stick and HP-Sucker. The HP-Sucker is another important item that you should definitely not leave without. Give it to Jeff and he can use it to steal HP from the enemy an unlimited number of times!
Go back down the ladder and into the next room you see. Inside you'll find a Magic Butterfly! Restore everyone's HP with PSI Lifeup and then restore everyone's PP with the butterfly by repeatedly entering the room. Use this room to your advantage by fighting Foppies over and over and healing when you need to. When you are ready, move on and you'll encounter Belch himself!
Leave through the door behind Master Belch and you'll eventually end up back in Saturn Valley. Use the Hot Springs to heal your HP and PP. Your next destination is a Sanctuary!